Re: Money, Taxes, and Government Debt

["John Gelles" <jjgelles@xxxxxxxx>]

        "State money is monetary base money which
        comprises currency, coin, and deposits at the
        Fed that are owned by the public."

            William Hummell
        ------------------------------


        "Monetary base money" is comprised of currency
        and coin and other things.  What are they?  And is
        the monetary base all owned by private sector firms
        and people?  Must all deposits qualified to be called
        a part of the base be in an account directly recorded
        by the Fed itself, or only with any commercial bank?


        What about the support for money -- like interest
        bearing bonds or gold, or the values of assets and
        future cash flows pledged or relied on in exchange
        for its creation?

        Bill Hummel suggest the diagram of the base is easy
        to understand. What about M1 itself, how much of it
        is the base?  Is the base synonymous with state money?

        As I recall "The Bankers" took 40 pages to explain how
        a simple check to pay a bill is processed. I have a feeling
        the monetary base and money outside the base are both
        not easy to understand.  The only easy thing to understand
        is what's it like to have no money.

                    John Gelles
                    http://www.1944.org
                    http://www.rain.org/~jjgelles/1944.html